Allowance 101

An allowance can be about so much more than just handing your kids some money. I've compiled some of the basics here.  And don't forget to download a copy of our free Smart Parents' Guide to Launching An Allowance.

How much money should an allowance be?

There is no defined right or wrong answer to this question.Things you may want to take into account include:

  • what your expectations are that your kids cover;

  • their age;

  • your family income. 


One rule of thumb is $1 per week per year of age.  In our house, we kept it simple, and gave each child $20 every 2 weeks, regardless of age, knowing that as they got older, there would be opportunities for them to take on paid jobs around the house (beyond their regular chores which remained unpaid).  For example, opportunities to babysit, or mow their grandparents’ lawn.

Value of Using Cash


​In today’s digital world where purchases are made with taps and swipes, the concept of mone can be too abstract for kids to fully grasp. Being able to touch cash, count it, and exchange it for items at the store takes these ideas from being abstract to being something that kids can more easily grasp. As kids grow, this leads to lots of great teachable moments where you can explain how their cash system relates to people buying things with a card.

Sample breakdown


I've been asked how much we give as an allowance and how we break it down.  We currently use the same approach for our three kids, ranging in age from 9-15:


$20 every 2 weeks 


$2 into Giving

$2 into Investing

$10 minimum into Saving

remainder ($6 max) into Spending


Many weeks, the kids will put the entire $16 into Saving for a bigger goal, and forego any smaller spending money.

Linking to Chores

Different parents have different views on whether a child's allowance should be tied to household chores.  In our house, we have decided to separate the allowance from household chores for two reasons.  First, we feel that chores are something that each person is responsible for by virtue of being part of the family.  We don't do chores for money - we do chores because they need to be done, and those jobs are shared among the family members.  They are not option - if one week you decide you don't need to money, you cannot opt out of your responsibilities.  Second, our focus with the allowance is to teach money management - before the allowance, I would by the (very) occasional treat, that was not associated with their chores - under the allowance system, this is no different - I am simply shifting some of the decision making to my kids.


Now that said, I know other parents who feel strongly that allowances should be contingent on completing certain chores, to build the understanding that money isn't something that you get automatically.  There is absolutely nothing wrong with this approach, and it will depend on your own priorities with having an allowance system.


Your decision may also develop with time.  For example, as our kids get older and their relationship with money matures, we have discussed linking the allowance to "extra" chores - they will still be responsible for certain tasks around the house, but the allowance could be tied to jobs that go "above and beyond".

How to use each Pocket

Looking for ideas of how to use Saving, Spending, Giving and Investing?  Click here for some allowance inspiration!


We've got lots more hints, tips and tricks in our blog.